Digital technologies such as robotics, mobile and social media, the internet of things, artificial intelligence and big data analytics are transforming the global economy. Overall, investments in these technologies are leading to an increase in productivity and EBITDA for a majority of companies. However, several factors influence the return on investment. A new report, Maximizing the Return on Digital Investments, published today by the World Economic Forum in collaboration with Accenture, looks at the impact of investments in digital technologies across 14 different industries.
The data shows that gains are not evenly distributed. The growth associated with these investments is currently driven by the top 20% of companies (by productivity) within each industry sector. Without broader implementation, an “industry inequality” could emerge, creating a small group of highly productive industry leaders and leaving the rest of the economy behind. SMEs in particular, often the driver of national economies, could suffer from competitive disadvantages.
The findings are based on a survey of over 16,000 businesses between 2015 and 2016 and mark a first attempt at quantifying the business impact of digital technologies. Among the key results are that investment in a combination of cognitive technologies, the internet of things, robotics and mobile/social media led on average to an increase in productivity three times higher than investments in any of these technologies individually.
The report, which aims to help business leaders make informed investments in technology, finds considerable variation between industries when it comes to digital investments. On average, heavier industries realize greater returns in productivity. Chemistry and Advanced Materials registered the greatest returns, with industry leaders achieving 160% additional EBITDA per employee investing in these technologies and 120% for the remainder of the sector. Gains by Professional Services businesses follow, generating 80% and 40% respectively. The heavier industries claim the highest gains from investment in robotics (90%), while mobile and social media provide a 70% return for service-oriented companies.
Of the technologies analysed, cognitive technologies offered the highest return, generating $1.90 per employee for every dollar invested. It is expected that the largest investment in these technologies between 2016 and 2020 will be in the internet of things as IoT build-out will generate the huge amounts of data needed for artificial intelligence and big data analytics to flourish.
“Digital transformation is a key driver of sweeping change in the world around us, improving people’s lives and opening new opportunities for businesses to grow and create value,” said Jonas Prising, Chairman and Chief Executive Officer of ManpowerGroup. “Yet gaps occur when innovation moves faster than organizational and societal frameworks allow. Wherever companies are on their digital journey, the path is clear: they need to invest in the technologies that maximize business opportunity on the one hand while developing people’s skills and capabilities to be successful in the digital age with the other.”
Would-be technology investors should be aware, however, that while industry leaders on the whole generate higher returns than followers, the survey finds that when it comes to internet of things and cognitive technologies, followers are able to benefit from the best practices and reduced costs made possible by pioneering leaders, and thus achieve a greater return.
“At the moment, companies are running the risk of investing in digital technologies without a full picture of the impact of those decisions. This is either because they find the benefits hard to quantify, they are worried about disrupting their own business model or they just don’t know how to make the right investments,” said Bruce Weinelt, Head of Digital Transformation of the World Economic Forum. “This report provides proof of positive returns on digital investments and offers executives practical guidelines.”
The report identifies five key drivers for maximizing value from digital investments:
Agile and digital-savvy leadership: nimble decision-making process combined with strategic vision across all management levels
Forward-looking skills agenda: Reskilling and aligning hiring around innovation to create a flexible, accountable workforce
Ecosystem thinking: success is increasingly dependent on customers, partners, and supply chain and other stakeholders
Data access and management: real-time insights are only possible with robust data infrastructure, warehousing and analytics
Technology infrastructure readiness: Effective use of cloud storage, cyber security, interoperability and transparency is key
The report was developed with input from Arne Sorenson, President and Chief Executive Officer, Marriott International, and Jonas Prising, Chairman and Chief Executive Officer, ManpowerGroup. It is part of the Forum’s Digital Transformation Initiative launched in 2015. Over the past three years, the initiative has analysed the impact of digital transformation across multiple industries with inputs from more than 450 experts, including over 200 chief executives.
Deloitte Unveils 2018 North America Technology Fast 500™ Rankings
Deloitte today released the “2018 North America Technology Fast 500,” an annual ranking of the fastest-growing North American companies in technology, media, telecommunications, life sciences and energy tech sectors. SwanLeap claimed the top spot with a growth rate of 77,260 percent from 2014 to 2017.
SwanLeap, is a leading end-to-end transportation technology provider for logistics managers and supply chain decision-makers. Founded in 2013, SwanLeap uses artificial intelligence and machine learning to reduce costs for corporate shippers and improve their supply chain performance. Its new technology is helping clients secure an annual average transportation savings of 27 percent. SwanLeap is one of the two Madison, Wisconsin-based companies in the top 10 this year.
Awardees are selected for this honor based on percentage fiscal year revenue growth from 2014 to 2017. Overall, the 2018 Technology Fast 500 companies achieved revenue growth ranging from 143 percent to 77,260 percent over the three-year time frame, with a median growth rate of 412 percent.
“Congratulations to the Deloitte 2018 Technology Fast 500 winners on this impressive achievement,” said Sandra Shirai, vice chairman, Deloitte LLP, and U.S. technology, media and telecommunications leader. “These companies are innovators who have converted their disruptive ideas into useful products, services and experiences that can captivate new customers and drive remarkable growth.”
“It is both humbling and validating for SwanLeap to be listed as the No. 1 fastest-growing company on the Deloitte Fast 500,” said Brad Hollister, CEO and co-founder of SwanLeap. “Our team has worked relentlessly to deliver unprecedented clarity and control to a fragmented shipping market through technology powered by artificial intelligence, curating cost-effective and personalized supply chain recommendations in real time. We are grateful to our employees and customers for making this achievement possible.”
The Technology Fast 500’s top 10 include:
|2018 Rank||Company||Sector||Revenue Growth (2014 to 2017)||City, State|
|1||SwanLeap||Software||77,260 percent||Madison, Wisconsin|
|2||Justworks||Software||27,150 percent||New York, New York|
|3||Shape Security||Software||23,576 percent||Mountain View, California|
|4||Periscope Data||Software||23,227 percent||San Francisco, California|
|5||Arrowhead Pharmaceuticals Inc.||Biotechnology/
|17,847 percent||Pasadena, California|
|6||Viveve Medical Inc.||Medical devices||16,887 percent||Englewood, Colorado|
|7||iLearningEngines||Software||14,848 percent||Bethesda, Maryland|
|8||Exact Sciences Corp.||Biotechnology/pharmaceutical||14,694 percent||Madison, Wisconsin|
|9||Podium||Software||13,381 percent||Lehi, Utah|
|10||Markforged||Electronic devices/hardware||12,687 percent||Watertown, Massachusetts|
Silicon Valley has largest share of winners
Deloitte’s Technology Fast 500 winners represent more than 38 states and provinces across North America.
California’s Silicon Valley continues to produce fast-growing companies, leading regional representation with 18 percent of this year’s Fast 500. The New York metro area also fared well with 14 percent of the companies; New England and Greater Washington, D.C., areas followed with 7 percent each, and Greater Los Angeles accounted for 6 percent. Following is a summary of the 2018 ranking by regions with a significant concentration of winners:
|Location||Percentage of List||Fastest-Growing Company in the Region||Overall Company Ranking||Dominant Sectors in Location|
|Silicon Valley||18 percent||Shape Security||3||Software 77 percent|
|New York Metro Area||14 percent||Justworks||2||Software 56 percent; Digital content/media/entertainment 23 percent|
|New England||7 percent||Markforged||10||Software 40 percent; Biotechnology/pharmaceuticals 29 percent; Medical devices 20 percent|
|Washington, DC||iLearningEngines||7||Software 75 percent|
|Greater Los Angeles Area||6 percent||Arrowhead Pharmaceuticals Inc.||5||Software 65 percent|
Software continues to dominate the list for the 23rd straight year
Software companies continue to deliver the highest growth rates for the 23rd straight year, representing 64 percent of the entire list and six of the top 10 winners overall. Of the private companies on the list, 34 percent identify themselves as part of the software as a service (SaaS) subsector, 17 percent in the enterprise software subsector, and 9 percent in fintech. Since the creation of the ranking, software companies have consistently made up the majority of winners, with a median growth rate of 412 percent in 2018.
Digital content, media and entertainment companies make up the second most prevalent sector in this year’s rankings, accounting for 12 percent of the Fast 500 companies and achieving a median growth rate of 385 percent in 2018. Biotechnology/pharmaceutical companies rank third at 11 percent of the list with a median growth rate of 411 percent.
The Technology Fast 500 by industry sector:
|Sector||Percentage||Sector Leader||Median Revenue Growth (2014 to 2017)|
|Software||64 percent||SwanLeap||412 percent|
|Digital content/media/entertainment||12 percent||Remark Holdings Inc.||385 percent|
|Biotechnology/pharmaceutical||11 percent||Arrowhead Pharmaceuticals Inc.||411 percent|
|Medical devices||5 percent||Viveve Medical Inc.||396 percent|
|Communications/networking||3 percent||xG Technology Inc.||394 percent|
|Electronic devices/hardware||3 percent||Markforged||410 percent|
|Semiconductor||1 percent||Aquantia Corp.||206 percent|
|Energy tech||1 percent||Momentum Solar||693 percent|
Four out of five companies received venture backing
In the 2018 Fast 500 rankings, 80 percent of the companies were backed by venture capital at some point in their company history. Notably, 25 of the top 30 companies on the Technology Fast 500 in 2018 received venture funding.
“Software, which accounts for nearly two of every three companies on the list, continues to produce the most exciting technologies of the 21st century, including innovations in artificial intelligence, predictive analytics and robotics,” said Mohana Dissanayake, partner, Deloitte & Touche LLP and industry leader for the technology, media and telecommunications industry, within Deloitte’s audit and assurance practice. “This year’s ranking demonstrates what is likely a national phenomenon, where many companies from all parts of America are transforming the way we do business by combining breakthrough research and development, entrepreneurship and rapid growth.”
Quantum Technologies Flagship kicks off with first 20 projects
The Quantum Technologies Flagship, a €1 billion initiative, was launched today at a high-level event in Vienna hosted by the Austrian Presidency of the Council of the EU.
The Flagship will fund over 5,000 of Europe’s leading quantum technologies researchers over the next ten years and aims to place Europe at the forefront of the second quantum revolution. Its long term vision is to develop in Europe a so-called quantum web, where quantum computers, simulators and sensors are interconnected via quantum communication networks. This will help kick-starting a competitive European quantum industry making research results available as commercial applications and disruptive technologies. The Flagship will initially fund 20 projects with a total of €132 million via the Horizon 2020 programme, and from 2021 onwards it is expected to fund a further 130 projects. Its total budget is expected to reach €1 billion, providing funding for the entire quantum value chain in Europe, from basic research to industrialisation, and bringing together researchers and the quantum technologies industry.
Andrus Ansip, Commission Vice-President for the Digital Single Market, said: “Europe is determined to lead the development of quantum technologies worldwide. The Quantum Technologies Flagship project is part of our ambition to consolidate and expand Europe’s scientificexcellence. If we want to unlock the full potential of quantum technologies, we need to develop a solid industrial base making full use of our research.”
Mariya Gabriel, Commissioner for Digital Economy and Society, added: “The Quantum Technologies Flagship will form a cornerstone of Europe’s strategy to lead in the development of quantum technologies in the future. Quantum computing holds the promise of increasing computing speeds by orders of magnitude and Europe needs to pool its efforts in the ongoing race towards the first functional quantum computers.”
In the early 20th century, the first quantum revolution allowed scientists to understand and use basic quantum effects in devices, such as transistors and microprocessors, by manipulating and sensing individual particles.
The second quantum revolution will make it possible to use quantum effects to make major technological advances in many areas including computing, sensing and metrology, simulations, cryptography, and telecommunications. Benefits for citizens will ultimately include ultra-precise sensors for use in medicine, quantum-based communications, and Quantum Key Distribution (QKD) to improve the security of digital data. In the long term, quantum computing has the potential to solve computational problems that would take current supercomputers longer than the age of the universe. They will also be able to recognise patterns and train artificial intelligence systems.
From October 2018 until September 2021, 20 projects will be funded by the Flagship under the coordination of the Commission. They will focus on four application areas – quantum communication, quantum computing, quantum simulation, quantum metrology and sensing – as well as the basic science behind quantum technologies. More than one third of participants are industrial companies from a wide range of sectors, with a large share of SMEs.
Negotiations are ongoing between the European Parliament, Council and Commission to ensure that quantum research and development will be funded in the EU’s multi-annual financial framework for 2021-2028. Quantum technologies will be supported by the proposed Horizon Europe programme for research and space applications, as well as the proposed Digital Europe programme, which will develop and reinforce Europe’s strategic digital capacities, supporting the development of Europe’s first quantum computers and their integration with classical supercomputers, and of a pan-European quantum communication infrastructure.
Since 1998, the Commission’s Future and Emerging Technologies (FET) programme has provided around €550 million of funding for quantum research in Europe. The EU has also funded research on quantum technologies through the European Research Council (ERC). Only since 2007, the ERC has funded more than 250 research projects related to quantum technologies, worth some 450 million euro.
The Quantum Technologies Flagship is currently supported by Horizon 2020 as part of the FET programme, which currently runs two other Flagships (The Graphene Flagship and the Human Brain Project Flagship). The FET programme promotes large-scale research initiatives to drive major scientific advances and turn them into tangible innovations creating benefits for the economy and society across Europe. Funding for the Flagship project comes from Horizon 2020, its successor programme Horizon Europe and national funding.
The Quantum Technologies Flagship is also a component of the Commission’s European Cloud Initiative launched in April 2016, as part of a series of measures to support and link national initiatives for the digitisation of Europe’s industry.
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PICREADI presents an interview with a prominent Russian expert in journalism and cybersecurity Elena Chernenko, Deputy head of Foreign Desk at the Kommersant daily newspaper in Moscow. The talk is about hackers, Russiagate and current challenges of the cyberspace.
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